Brazilian court blocks Petrobras gas project with Brookfield

An important gas distribution deal between Petrobras SA and Brookfield Asset Management Inc. and other investors for over $5.2 million just ran into a legal barrier. A Brazilian federal judge granted an injunction against the acquisition of Nova Transportadora do Sudeste on Friday on grounds that the sale wasn’t sufficiently publicized to foster competition, according to a copy of the court decision reviewed by Bloomberg.

Petrobras is taking the necessary legal steps to protect its interests and those of its shareholders, the Rio de Janeiro-based oil producer said in a statement.

The decision represents another hit to Petrobras’ plan to restore its financial health after a massive divestment program that faced legal challenges since late-2016, when a Brazilian court of audit, known as TCU, suspended all asset sales that were not in their final stages of negotiation.

Petrobras has previously said it would incorporate recommendations from the audit court and reiterated its plan to sell about $35 billion in assets from 2015 through 2018.

Nova Transportadora supplies gas to Brazil’s most populated and industrialized states of Sao Paulo, Rio de Janeiro and Minas Gerais. When the deal was announced in September, Brookfield said it was a unique opportunity to participate in a natural gas market that will grow substantially in the coming years.

Brookfield Infrastructure Partners LP, a unit of the largest alternative asset manager in Canada, led by a group of buyers including CIC Capital Corp, and GIC Private Ltd., committed to take a 90 percent stake in Nova Transportadora.

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